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Posts Tagged ‘wall st.’

Labor Unions Join Wall St. Protesters

Oct 5 (Reuters) – Labor unions including nurses and transit workers planned to join a an anti-Wall Street march on Wednesday through New York’s financial district, and some college students walked out of classes in solidarity with the growing protest movement.

The American Federation of State County and Municipal Employees, Communications Workers of America and the Amalgamated Transit Union said they would be joining the protesters voicing discontent and anger over high unemployment, home foreclosures and the 2008 corporate bailouts.

The nation’s largest union of nurses, National Nurses United, also said it would take part in the New York march, set for late afternoon in downtown Manhattan.

Students on college campuses added their voices, with walkouts scheduled on Wednesday at some 75 universities across the nation.

“We stand in solidarity with those protesting Wall Street’s greed,” said Gerald McEntee, president of the 1.6 million-member AFSCME union, in a statement. “The economy that has wrecked so many lives, obliterated jobs, and left millions of Americans homeless and hopeless is the fault of banks that gamble with our future.”

The Coming Debt Crisis

SAN FRANCISCO (MarketWatch) — The financial crisis never really went away.

The debt mountain that brought down some of the world’s biggest banks and dragged the international financial system to the brink of disaster has simply shifted to governments. Now, it’s threatening countries around the globe and if left unchecked could rip the very fabric of Europe’s economic system and wreck economic recoveries in the U.S., China and Latin America.

The impact on markets has been severe. The euro has slumped more than 12% against the dollar since the sovereign debt crisis flared in southern Europe. Gold has marched to new highs as investors seek a safe haven and, perhaps most alarming, it is now more expensive to buy insurance against national default than it is to insure against corporate failure.

“The sovereign debt crisis spun out of control in the past week, and we see no easy way to resolve it,” said Madeline Schnapp, director of macroeconomic research at TrimTabs Investment Research.

Some investors and analysts are increasingly concerned that governments may be no more capable of repaying their debts than the banks and insurance companies they saved. And, they warn, if a major country comes close to default, it could trigger a financial meltdown that would eclipse the panic that followed the bankruptcy of Lehman Brothers in 2008.

“The problem of the western world is that we have too much debt,” said Daniel Arbess, who manages the Xerion investment strategy at Perella Weinberg Partners. “Rather than reducing our debt, we’ve been moving it from one balance sheet to another.”

“All we’re doing is shifting chairs on the deck of the Titanic,” he added.

Goldman Case Shows Wall Street’s True Colors

NEW YORK (MarketWatch) — We’re still feeling the aftershocks from the bombshell complaint the Securities and Exchange Commission filed against Goldman Sachs Group Inc.

Though the case is a long way from being resolved — and appears to have some big legal weaknesses — several things are clear by now. The once untouchable Goldman has suffered a severe blow to its reputation. The SEC has taken a small step to restoring its own once-good name.

This politically polarized case (which got through a divided Commission by one vote) has been a shot in the arm for the Obama administration’s efforts to get financial reform through Congress. And more big Wall Street firms may be in the SEC’s crosshairs for doing similar things to what Goldman is alleged to have done.

But even after the worst financial crisis since the 1930s, the Wall Street banks have won victory after victory in their lobbying efforts and have paid their undeserving minions rich bonuses, which have really stuck in the public’s craw.

I fervently hope that finally, finally something will be done to curb this extraordinary abuse of power by these opaque, unaccountable firms that have done so much damage.

At a time when most Americans are wary, even hostile, to big government–and rightly so–they just as decisively support reining in Wall Street’s dukes and duchesses with sensible regulation that prevents them from screwing things up again for the rest of us.

Is Goldman Sachs Making Too Much Money?

There’s no shame in making money. Making money is, after all, every company’s goal. And when our companies do well, that’s generally good for the country. Under normal circumstances Goldman Sachs would have every reason to brag about it’s first quarter profits.

But now—with Goldman facing charges for securities fraud and apparently seeking to block financial reform legislation—the bank’s windfall profits seem to raise the question of whether it’s making its money legitimately.

Goldman reported an impressive $3.3 billion first quarter profit today. That’s its second highest quarterly profit since going public in 1999, and it comes after earning a record $4.79 billion in the fourth quarter of last year. It’s also an increase of 91% on the year. And on revenue of $12.8 billion it’s a tidy 26 cents profit for every dollar it earned, which is actually down from the from the almost 50 cents of profit it made for every dollar of revenue the quarter before.

Of course, these profits have nothing to do with the 2007 trades the Securities and Exchange Commission says are fraudulent. And Goldman’s reputation as the gold standard of banks is well-earned, so it should be no surprise that it’s doing well.

But you still have to wonder just how it’s making so much money in an otherwise anemic economy.

Looting Main Street

If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while.

The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff’s precincts had to be closed so that Wall Street banks could be paid.

As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered.

She also fielded calls from laid-off co-workers who had it even tougher. “I’d be on the phone sometimes until two in the morning,” she says. “I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I’d go to bed at night, and I’d be in tears.”

Homes stood empty, businesses were boarded up, and parts of already-blighted Birmingham began to take on the feel of a ghost town. There were also a few bills that were unique to the area — like the $64 sewer bill that Pack and her family paid each month. “Yeah, it went up about 400 percent just over the past few years,” she says.

The sewer bill, in fact, is what cost Pack and her co-workers their jobs. In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 — but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase.

The result was a monstrous pile of borrowed money that the county used to build, in essence, the world’s grandest toilet — “the Taj Mahal of sewer-treatment plants” is how one county worker put it. What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street — and misery for people like Lisa Pack.